Donald Trump considers naming Iran's Revolutionary Guard as a terror group in latest swipe at the country's regime 

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President Donald Trump is considering adding Iran's Islamic Revolutionary Guard Corps to the list of prohibited terrorist organizations, further deteriorating relations with Tehran. 

The IRGC is Iran's most powerful security institution and is hugely influential politically and economically in the country. 

US officials have been briefing journalists on the proposals. The US currently has restrictions on individuals and organizations linked to the IRGC.  

US President Donald Trump, sitting in the Oval office along with National Security Adviser Michael Flynn, center and chief strategist Steve Bannon, right, is considering designating the Iranian Revolutionary Guard Corps as a terrorist organization by an executive order 

The Iranian Revolutionary Guard Corps is the most powerful security and political organization in Tehran and placing it on a terror list could impact the United States' fight against ISIS 

Donald Trump is believed to be preparing a range of new executive orders in the near future

Trump could sign an executive order designating the IRGC as a terror organization which could have implications concerning the fight against ISIS as Tehran is vehemently opposed to the predominantly Sunni terror group. 

The White House is also considering placing the Muslim Brotherhood on the terror organization list, although this decision may be delayed. 

Naming Iran's single most powerful military and political institution as a terrorist group could have potentially destabilising effects, including further inflaming regional conflicts in which the United States and regional arch-rivals blame Iran for interference. Iran denies those allegations.

It would also likely complicate the U.S. fight against ISIS in Iraq, where Shi'ite militias backed by Iran and advised by IRGC fighters are battling the Sunni jihadist group.

Some of Trump's more hawkish advisors in the White House have been urging him to increase sanctions on Iran since his administration began to take shape. After tightening sanctions against Iran last week in response to a ballistic missile test, White House officials said the measures were an 'initial' step.

US Gulf allies have long favored a tougher US stance against Iran, whom they blame for regional interference.

Trump is considering imposing a range of new sanctions on the Iranian regime 

But officials said the process for issuing potentially controversial orders has slowed considerably in the wake of the political and legal uproar over Trump's order to ban entry to the United States from seven majority-Muslim countries, which is now the focus of a federal appeals court battle.

The United States has already blacklisted dozens of entities and people for affiliations with the IRGC. 

In 2007, the US Treasury designated the IRGC's Quds Force, its elite unit in charge of its operations abroad, 'for its support of terrorism', and has said it is Iran's 'primary arm for executing its policy of supporting terrorist and insurgent groups'.

A designation of the entire IRGC as a terrorist group would potentially have much broader implications, including for the 2015 nuclear deal negotiated between Iran and the United States and other major world powers.

The nuclear deal, which has been harshly criticized by Republicans in Congress and Trump for giving Iran too much and not placing tight enough restrictions on the country, granted Iran relief from most Western sanctions in return for curbs on its nuclear program.

Reuters reported last week that the IRGC designation is among the proposals being considered as part of an Iran policy review in the Trump administration. The objective would be to dissuade foreign investment in Iran's economy, because of the IRGC's involvement in major sectors including transportation and oil. In many cases, that involvement is hidden behind layers of opaque ownership.

One senior official told Reuters: 'The new administration regards Iran as the clearest danger to U.S. interests, and they've been looking for ways to turn up the heat.'

The official said that rather than tearing up the nuclear agreement, a step he said even Israel and Saudi Arabia oppose, the White House might turn instead toward punishing Iran for its support for Lebanese militant group Hezbollah, the Houthi rebels in Yemen, and some Shiite forces in Iraq, as well as covert support for Shiites who oppose the Sunni regime in Bahrain, and cyber attacks on Saudi and other Gulf Arab targets.

But sanctioning the IRGC could backfire, this official warned. It could strengthen the hardliners and undercut more moderate leaders such as Iranian President Hassan Rouhani, and encourage Iranian-backed forces in Iraq and Syria to curtail any action against Islamic State in Syria and Iraq and perhaps even sponsor actions against U.S.-backed or even American forces battling Islamic State in Iraq.

The Revolutionary Guards answer to Iranian Supreme Leader Ayatollah Ali Khamenei, whose power far surpasses that of Rouhani.

The official warned: 'The Iranians will not take any US action lying down. They may not act quickly or in the open, but there is a danger of an escalating conflict.'

Current U.S. sanctions include penalties for foreign companies which knowingly conducting 'significant' transactions with the Revolutionary Guards, or other sanctioned Iranian entities. However, many companies in which the Revolutionary Guards have an interest in or own are not blacklisted, and have been able to sign foreign deals.

Sanctions lawyers say the fine print of existing U.S. sanctions allows foreign companies to continue to deal with some IRGC-held firms indirectly.